Forest Service acts on appraisal, releasing college plan from limbo

After an agonizing eight-month delay, Tonto National Forest Supervisor Neil Bos­worth confirmed this week that he’s finally ready to seek an appraiser to put a value on the a 253-acre parcel on which the Rim Country Educational Alliance wants to build a university.

“This is the first experience I’ve had with a project of this size,” said Bosworth. “So there’s been a lot of delays I wouldn’t have expected — but none of these (sales and trades) are easy. I feel we’re in the home stretch here, but it’s been a painfully slow process.”

Bosworth said the Tonto Forest would give four or five qualified independent appraisers the bid package next week, with a 10-day deadline for submitting a bid. He said he expects it will take just three or four days to then review the bids and pick an appraiser. The Forest Service can’t actually send out the bid proposal until it receives a check for $24,000 from the Alliance in its regional office, said Bosworth.

One factor in the selection will be how fast the appraiser can get the job done. Bosworth said he expects the appraisal itself will take up to 75 days, but may take less. He predicted the Forest Service and the Alliance should have an agreed-upon price for the land no later than August.

At that point, the Alliance could go into escrow and probably complete the sale before the end of the year. Bosworth said getting final approval of the title transfer could take six months after the Alliance and the Forest Service agree on a price be­cause various other officials in the Forest Service and Bureau of Land Management’s land patent office must review the final agreement.

However, in theory the Alliance could lock in the sale and the timeline in August and then finish negotiations with developers, financiers and university partners to start construction early next year.

The Alliance must still finalize the master plan, including infrastructure, sign development agreements, conclude intergovernmental agreements and lock in the financing.

Rim Country Educational Alliance Chairman Steve Drury said, “I am pleased we are moving forward again. And although a number of significant steps lie ahead before a campus can be opened for business, those steps are softballs compared to the boulders we have had to negotiate around over the past three years.”

A clearly frustrated but hopeful Mayor Kenny Evans declined comment, other than to say he was thankful the process was finally making some progress.

Tonto National Forest Supervisor Neil Bos­worth

Payson first signed a memorandum of understanding with Arizona State University to build a campus here in early 2010, but the project hit one unanticipated delay after another. For instance, backers thought the project would move quickly along after the Forest Service last August signed off on the environmental assessment, which found no environmental issues save a scattering of pottery shards. But first winning approval of a direct sale and then drawing up the bid package for an appraisal consumed an agonizing nine months.

Wait for regional office

The latest delay centered on the wait for the regional office in Albuquerque to prepare a Scope of Work for the bid package for an independent appraisal to set a price for a direct sale of the property to the Rim Country Educa­tional Alliance. The Alliance has been struggling to buy the property for more than three years, which has cast into limbo the negotiations with Arizona State University to effectively lease the campus buildings. The Alliance would own the buildings until it pays off the initial loans, and then probably turn them over to the university. The university would likely pay no lease for the first few years and the Alliance would provide upfront money to cover the university’s anticipated operating losses during those startup years.

The plan calls for attracting students by providing scholarships and subsidies to reduce their costs compared to other campuses through donations and revenue flowing in from the dorms and various spinoff businesses — including a conference hotel center, an incubation center to turn university research into patent­able products and a research industrial park.

Meeting with ASU

Drury has confirmed that representatives’ negotiators have met repeatedly with ASU to work out final details of the partnership. He termed the negotiations “cordial and very productive” in working out ways to cover the deficits the university predicts it will face in getting the 1,000-student phase one up and running. The university has worked out key points, but put the talks on hold until the Alliance could guarantee a timetable by locking in the land purchase.

One key point included whether the revenue from the student dorms should flow to the developer of the dorms, who would then make payments to the Alliance to help keep the university’s lease payments low. The Alliance has also agreed to not charge ASU rent during the first several years during the operations of the 1,000-student phase one and to provide money to cover the deficit the university predicts it will run initially.

The plan calls for a distinctive campus nestled among groves of centuries-old ponderosa pines with multi-story dorms, classrooms and administrative buildings designed to use as little energy as possible and leave as much of the hilly site undisturbed as possible. The campus will also use solar and possibly geothermal energy to minimize energy use, which will lend itself to studies of “green” design and technology expected to become an academic focus of the university as well. The buildings and dorms will include the latest classroom and Internet technology, thanks to several corporate partnerships. The classrooms and dorms will utilize technologies that can turn walls and countertops into huge computer screens.

The confirmation from Bosworth this week that the appraisal office in the regional headquarters has finally signed off on the specifications means the project can move forward again after a maddening delay to complete what backers assumed was a simple Forest Service task.

Stuck for six months

The project apparently got stuck for six months in the shortage of people in the regional office to draw up the requirements for a bid from the independent appraisers. Most of that delay resulted from the number of other projects clamoring for the attention of the single person in the regional office who could sign off on the specifications for the bid.

The task was also reportedly complicated by controversy about another Forest Service land swap in the region known as Show Low South. The project involves the exchange of 1,000 acres for the expansion of the Show Low sewage treatment plant and several housing developments. Like Payson, Show Low remains an economically hard-pressed island of private land in a vast sea of federal land. The town and developers have been struggling since 2009 to win approval of the land exchange, which would provide 1,500 acres of more environmentally sensitive land affecting a bundle of endangered species in scattered in-holdings. The environmental assessment of that project raised concerns about decreasing recreational activities on the 1,000 acres of land exchanged — even though the new land would provide even more abundant recreational gains on the 1,500 acres added to the federal holdings. Reportedly, the appraisal process in that case came into question after Forest Service officials concluded the values established by the independent appraiser were too low.

Three years is fast for FS

Against that backdrop, Tonto Forest officials said the three years it has taken to get the direct sale of the 253 acres to this point counts as quick.

Nonetheless, the six-month wait for the Forest Service to produce a seemingly straightforward bid package so an independent appraiser could place a value on vacant land seems absurd on the face of it.

But Bosworth said it mostly came down to a shortage of manpower in the regional office. Ironically, the lack of a Forest Service appraiser prompted the Alliance to push for the selection of an independent appraiser, in the apparently mistaken belief that it could quickly get a private appraiser into the field.

Questions about water

Bosworth said he thought writing the scope of work document probably took a month, but it took maybe five months for the Forest Service to get around to writing it given the press of other projects.

Alliance officials during the interminable delay said the Forest Service appraiser writing the request for proposals asked repeatedly for additional documentation, that not only included detailed plans for development of the site, but for repeated assurances that the site would have water when developed. Alliance officials assured him the site will have water and the appraisal should make that assumption, but the Forest Service pointed to a line in the manual governing appraisals for this region that said the appraiser couldn’t “assume” a property had water available. So the Forest Service official asked in sequence for letters from Payson Mayor Kenny Evans, Payson Water Department Director Buzz Walker and finally the Arizona Department of Water Resources.

But Bosworth cautiously predicted that the long delays have ended — although the regional office will also have to review the final appraised price and then sign off once again on the completion of the sale.

Bosworth said the Alliance and the Forest Service have also worked out the details of how to handle an archaeological study of a scattering of artifacts found on the site during the environmental assessment — which itself delayed the project for close to a year.

The assessment found no significant environmental problems with the land sale, but did find indications of at least temporary use of the site by the Mogollon people some 500 years ago. Only one site seemed even potentially significant, with pottery shard indications of a perhaps-seasonal occupation in a cluster of boulders on a ridgeline the Alliance has no intention of disturbing in building the campus.

Archaeological studies needed

Nonetheless, the discovery of the potential archaeological site caused additional months of delay. The Alliance for a time considered putting up a $500,000 bond to ensure the completion of the work even after it buys the land, although officials say the work needed to confirm no significant sites exist will probably cost closer to $100,000.

The new arrangement involves doing the archaeological work in a month to six weeks prior to the close of escrow in nine to 10 months. Normally, it takes a month to close escrow on a private sale. Bosworth said that based on a preliminary report from the archaeological consultants he could transfer title to the Alliance, with the full, written report detailing all the findings coming along after the property changes hands.

Bosworth noted, “when the Alliance decides to start the mitigation work, it will take time to collect the archaeological data, however, I don’t anticipate that will delay transfer of title.”

Bosworth said that the Tonto National Forest could now ramp up planning for spending the money it will get from the sale. Some 14 years ago, Congress specifically earmarked the site for sale and in a special provision allowed the money to go to the Tonto Forest instead of into the Treasury. The Payson Ranger District plans to build an office, facilities for firefighters and a new helipad and support facilities for firefighting helicopters.

Paying for the appraisal

The Alliance will have to pay the cost of the appraisal — which may run to $30,000. However, Alliance officials didn’t get to see the bid specifications, won’t get to see the bids the appraisers submit, won’t get a say in which appraiser the Forest Service selects and won’t get to review the submitted appraisal until both the Tonto National Forest office and the regional office accept the bid.

“We talked about it with the Alliance,” said Bosworth. “It’s to keep the complete separation. If it looks like the purchaser has had involvement in any of the development or selection of the appraiser — that’s a problem. So it’s in the best interest of everybody — we have to keep this by the book to keep them as separated from the appraisal process as possible. When we get the final appraisal, they will see it, but they won’t see it until it’s finalized.”